TORONTO — The Bank of Nova Scotia is among lenders boosting loans to condominium developers as regulators become less vocal about housing-market risk, according to Canada’s third-biggest bank.

Scotiabank is financing as much as 75% of a condo project’s value and others are doing the same, according to Chris Milne, vice-president of real estate lending at the bank. That’s up from about 70% in the past, when banks were concerned “there may be a meltdown” and regulators were more vocal about residential market risk, Mr. Milne said.

“The banks are back out there lending in the condo sector,” Mr. Milne said at a Toronto real estate conference Tuesday. “There is a hole that the banks are looking to fill. The regulators were really pounding them a year and a half ago and now it’s quiet.”

There is a hole that the banks are looking to fill

Banks are boosting financing to condo developers even as the number of unsold units in Canada’s largest city reached a 21-year high in January. There are about 1,600 unsold units on the market following a record number of completions in January, according to a report from Sal Guatieri, senior economist at Bank of Montreal.

Federal regulators have eased warnings on the real estate market compared with the late Finance Minister Jim Flaherty and former Bank of Canada Governor Mark Carney, Mr. Milne said. Mr. Flaherty backed several mortgage rule changes that tightened scrutiny of the so-called Big Six banks while Mr. Carney often commented on the risk of record consumer debt.

Canada Mortgage & Housing Corp. no longer insures loans to developers to construct condominiums. The federal housing agency said in June it would drop coverage as it seeks to distance taxpayers from the risk of falling home prices.

Spokesmen for the Department of Finance, Bank of Canada, and Office of the Superintendent of Financial Institutions, which oversees federally regulated firms including banks, did not immediately respond to requests seeking comment.

Lenders require a building to be 65% sold before making a loan, Mr. Milne said. A developer would need to inject more of their own equity into the project if a bank were to finance a building less than 65% sold, he said.

“Sales are not where they were in late 2007 where you can sell a high-rise condo in a week,” Mr. Milne said. “Now it takes a while.”